Loans and Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 30, 2023

Receivables [Abstract]

Schedule of Company's Loan

The following presents a summary of the Company’s loans at amortized cost as of the dates noted (dollars in thousands):

	September 30,			December 31,
	2023			2022
1-4 Family residential real estate	$	63,639		$	63,176
Commercial		50,579			48,567
Consumer and other		1,021			1,048
Construction		39,152			43,664
Non-Owner Occupied (NOO) CRE		186,366			185,699
Owner Occupied (OO) CRE		83,144			61,375
Multifamily		57,700			61,201
Gross loans		481,601			464,730
Deferred loan fees		(1,385	)		(1,370	)
Loans held for investment		480,216			463,360
Less: allowance for credit losses		(8,391	)		(4,778	)
Loans, net	$	471,825		$	458,582

Schedule of Allowance for Credit Losses

Allocation of a portion of the allowance for credit losses to one category of loans does not preclude its availability to absorb losses in other categories. The following table presents the activity in the allowance for credit losses by portfolio segment for the three and nine months ended September 30, 2023 and September 30, 2022 (dollars in thousands):

	1-4 Family												NOO		OO
	Residential						Consumer						Commercial		Commercial
	Real Estate			Commercial			and Other			Construction			Real Estate		Real Estate		Multifamily			Total
Changes in allowance for credit losses for the three months ended September 30, 2023
Beginning balance	$	452		$	476		$	7		$	745		$	2,043	$	926	$	571		$	5,220
Provision (credit) for loan losses		34			213			—			(167	)		2,880		216		(1	)		3,175
Loans charged off		—			(6	)		—			—			—		—		—			(6	)
Recoveries		2			—			—			—			—		—		—			2
Balance on September 30, 2023	$	488		$	683		$	7		$	578		$	4,923	$	1,142	$	570		$	8,391
	1-4 Family												NOO		OO
	Residential						Consumer						Commercial		Commercial
	Real Estate			Commercial			and Other			Construction			Real Estate		Real Estate		Multifamily			Total
Changes in allowance for credit losses for the nine months ended September 30, 2023
Beginning balance	$	454		$	1,382		$	56		$	222		$	1,680	$	555	$	429		$	4,778
Impact of adopting of ASU 2016-13		(33	)		(307	)		(50	)		441			271		142		140			604
Provision (credit) for loan losses		62			(71	)		1			(85	)		2,972		445		1			3,325
Loans charged off		—			(321	)		—			—			—		—		—			(321	)
Recoveries		5			—			—			—			—		—		—			5
Balance on September 30, 2023	$	488		$	683		$	7		$	578		$	4,923	$	1,142	$	570		$	8,391
Allowance for credit losses - September 30, 2023
Ending balance individually evaluated	$	—		$	259		$	—		$	—		$	2,984	$	—	$	—		$	3,243
Ending balance collectively evaluated		488			424			7			578			1,939		1,142		570			5,148
Total	$	488		$	683		$	7		$	578		$	4,923	$	1,142	$	570		$	8,391
Gross loans - September 30, 2023
Ending balance individually evaluated	$	345		$	2,097		$	—		$	22		$	6,500	$	—	$	963		$	9,927
Ending balance collectively evaluated		63,294			48,482			1,021			39,130			179,866		83,144		56,737			471,674
Total	$	63,639		$	50,579		$	1,021		$	39,152		$	186,366	$	83,144	$	57,700		$	481,601

	1-4 Family											NOO			OO
	Residential					Consumer						Commercial			Commercial
	Real Estate			Commercial		and Other			Construction			Real Estate			Real Estate			Multifamily		Total
Changes in allowance for loan losses for the three months ended September 30, 2022
Beginning balance	$	602		$	600	$	99		$	389		$	2,761		$	885		$	625	$	5,961
Provision (credit) for loan losses		88			558		(16	)		(48	)		(364	)		(93	)		—		125
Loans charged off		—			—		—			—			—			—			—		—
Recoveries		2			—		—			—			—			—			—		2
Balance on September 30, 2022	$	692		$	1,158	$	83		$	341		$	2,397		$	792		$	625	$	6,088
	1-4 Family											NOO			OO
	Residential					Consumer						Commercial			Commercial
	Real Estate			Commercial		and Other			Construction			Real Estate			Real Estate			Multifamily		Total
Changes in allowance for loan losses for the nine months ended September 30, 2022
Beginning balance	$	470		$	647	$	101		$	282		$	2,565		$	731		$	532	$	5,328
Provision (credit) for loan losses		242			511		(18	)		59			(168	)		61			93		780
Loans charged off		(26	)		—		—			—			—			—			—		(26	)
Recoveries		6			—		—			—			—			—			—		6
Balance on September 30, 2022	$	692		$	1,158	$	83		$	341		$	2,397		$	792		$	625	$	6,088

Schedule of Loan Category and Aging Analysis of Loans

The following tables presents the aging of the recorded investment in past due and nonaccrual loans, as of September 30, 2023, and December 31, 2022. It is shown by class of loans (dollars in thousands):

	Loans Past Due Accruing Interest										Loans Not
	30-59		60-89		Over 90				Loans on		Past Due or
September 30, 2023	Days		Days		Days		Total		Non-Accrual		Non-Accrual		Total
1-4 Family residential real estate	$	—	$	—	$	—	$	—	$	345	$	63,294	$	63,639
Commercial		—		—		—		—		2,097		48,482		50,579
Consumer and other		—		—		—		—		—		1,021		1,021
Construction		—		—		—		—		22		39,130		39,152
NOO CRE		—		—		—		—		6,500		179,866		186,366
OO CRE		—		—		—		—		—		83,144		83,144
Multifamily		—		—		—		—		963		56,737		57,700
Total	$	—	$	—	$	—	$	—	$	9,927	$	471,674	$	481,601
	Loans Past Due Accruing Interest										Loans Not
	30-59		60-89		Over 90				Loans on		Past Due or
December 31, 2022	Days		Days		Days		Total		Non-Accrual		Non-Accrual		Total
1-4 Family residential real estate	$	536	$	441	$	—	$	977	$	719	$	61,480	$	63,176
Commercial		313		427		292		1,032		1,641		45,894		48,567
Consumer and other		—		—		—		—		—		1,048		1,048
Construction		—		—		—		—		1,591		42,073		43,664
NOO CRE		512		—		—		512		—		185,187		185,699
OO CRE		—		—		—		—		—		61,375		61,375
Multifamily		—		519		—		519		—		60,682		61,201
Total	$	1,361	$	1,387	$	292	$	3,040	$	3,951	$	457,739	$	464,730

Schedule of Average Recorded Investment and Interest Income Recognized

December 31, 2022	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment
With no related allowance recorded:
Commercial Real Estate	$	1,591	$	1,591	$	—	$	1,464
1-4 Family Residential RE		719		719		—		739
Commercial and Industrial		—		—		—		—
Consumer		—		—		—		—
With an allowance recorded:
Commercial Real Estate		—		—		—		—
1-4 Family Residential RE		—		—		—		—
Commercial and Industrial		4,546		1,641		99		4,333
Consumer		—		—		—		—
Total	$	6,856	$	3,951	$	99	$	6,536

Schedule of loan category and loan by risk categories

	Term Loans Amortized Cost by Origination
													Revolving		Revolving
													Loans		Loans
													Amortized		Converted
September 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		to Term		Total
1-4 Family
Pass	$	3,753	$	24,494	$	12,494	$	8,116	$	1,534	$	9,968	$	2,382	$	—	$	62,741
Special Mention		—		—		—		—		—		553		—		—		553
Substandard		—		—		—		—		—		345		—		—		345
Doubtful		—		—		—		—		—		—		—		—		—
Total 1-4 Family		3,753		24,494		12,494		8,116		1,534		10,866		2,382		—		63,639
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—
Commercial
Pass		12,504		15,416		3,390		5,498		156		1,314		10,152		—		48,430
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		1,704		96		—		97		—		1,897
Doubtful		—		—		—		—		252		—		—		—		252
Total Commercial		12,504		15,416		3,390		7,202		504		1,314		10,249		—		50,579
Current year-to-date gross write-offs		—		—		—		—		321		—		—		—		321
Consumer and other
Pass		40		148		0		7		12		3		811		—		1,021
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total Consumer and Other		40		148		0		7		12		3		811		—		1,021
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—
Construction
Pass		6,845		26,821		4,022		42		321		630		450		—		39,130
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		21		—		—		—		—		—		—		21
Doubtful		—		—		—		—		—		—		—		—		—
Total Construction		6,845		26,842		4,022		42		321		630		450		—		39,152
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—
NOO CRE
Pass		7,223		38,313		56,167		21,337		14,057		38,396		4,081		—		179,574
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		6,500		—		—		293		—		—		—		—		6,793
Doubtful		—		—		—		—		—		—		—		—		—
Total NOO CRE		13,723		38,313		56,167		21,630		14,057		38,396		4,081		—		186,366
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—
OO CRE
Pass		20,971		12,140		20,998		8,224		5,859		4,496		25		—		72,712
Special Mention		—		—		7,240		—		—		1,705		—		—		8,945
Substandard		—		—		—		39		1,205		243		—		—		1,487
Doubtful		—		—		—		—		—		—		—		—		—
Total OO CRE		20,971		12,140		28,237		8,262		7,064		6,444		25		—		83,144
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—
Multi Family
Pass		99		12,065		22,149		7,634		6,580		7,825		386		—		56,737
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		963		—		—		—		—		—		963
Doubtful		—		—		—		—		—		—		—		—		—
Total Multi Family		99		12,065		23,112		7,634		6,580		7,825		386		—		57,700
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—
Total	$	57,935	$	129,418	$	127,423	$	52,892	$	30,072	$	65,478	$	18,384	$	—	$	481,601
Total year-to-date gross write-offs	$	—	$	—	$	—	$	—	$	321	$	—	$	—	$	—	$	321

As of December 31, 2022, the risk category of loans by class of loans was as follows (dollars in thousands):

			Special						Not Risk
December 31, 2022	Pass		Mention		Substandard		Doubtful		Rated		Total
1-4 Family	$	62,517	$	—	$	659	$	—	$	—	$	63,176
Commercial		46,474		377		1,716		—		—		48,567
Consumer and other		993		—		—		—		55		1,048
Construction		42,073		—		1,591		—		—		43,664
NOO CRE		185,699		—		—		—		—		185,699
OO CRE		57,407		3,685		283		—		—		61,375
Multi Family		61,201		—		—		—		—		61,201
Total	$	456,364	$	4,062	$	4,249	$	—	$	55	$	464,730

Schedule of Nonaccrual Loans

	As of September 30, 2023
	Non-accrual loans				Loans past due
	with		Total non-accrual		over 89 days and
	no ACL		loans		still accruing
1-4 Family residential real estate	$	345	$	345	$	—
Commercial		1,723		2,097		—
Consumer and other		—		—		—
Construction		22		22		—
NOO CRE		—		6,500		—
OO CRE		—		—		—
Multifamily		963		963		—
Total	$	3,053	$	9,927	$	—
	As of December 31, 2022
	Non-accrual loans				Loans past due
	with		Total non-accrual		over 89 days and
	no ACL		loans		still accruing
1-4 Family residential real estate	$	719	$	719	$	—
Commercial		—		1,641		292
Consumer and other		—		—		—
Construction		1,591		1,591		—
NOO CRE		—		—		—
OO CRE		—		—		—
Multifamily		—		—		—
Total	$	2,310	$	3,951	$	292

Schedule of Collateral Dependent Loans

	As of September 30, 2023
	Collateral Dependent Loans
	Secured by		Secured by
	Real Estate		Other		Total
1-4 Family residential real estate	$	345	$	—	$	345
Commercial		—		2,097		2,097
Consumer and other		—		—		—
Construction		22		—		22
NOO CRE		6,500		—		6,500
OO CRE		—		—		—
Multifamily		963		—		963
Total	$	7,830	$	2,097	$	9,927